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Second thoughts on development accounting

  • E. Gundlach
  • D. Rudman
  • L. Wossmann

The relative roles of factor inputs and productivity are estimated in explaining the level of economic development. For a large sample of countries, it is shown that international differences in factor inputs account for between two thirds and three quarters of international differences in output per worker if alternative identifying productivity assumptions and a quality-adjusted measure of human capital are employed. For a sample of OECD countries, it is found that all differences in output per worker can be attributed to differences in factor inputs, leaving no role for international productivity differences. This result supports the reasoning of a traditional neoclassical growth model.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 34 (2002)
Issue (Month): 11 ()
Pages: 1359-1369

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Handle: RePEc:taf:applec:v:34:y:2002:i:11:p:1359-1369
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  1. Barro, Robert J, 1999. " Notes on Growth Accounting," Journal of Economic Growth, Springer, vol. 4(2), pages 119-37, June.
  2. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  3. Eric A. Hanushek & Dongwook Kim, 1995. "Schooling, Labor Force Quality, and Economic Growth," NBER Working Papers 5399, National Bureau of Economic Research, Inc.
  4. Douglas Gollin, 2001. "Getting Income Shares Right," Department of Economics Working Papers 2001-11, Department of Economics, Williams College.
  5. Nelson, Richard R, 1973. "Recent Exercises in Growth Accounting: New Understanding or Dead End?," American Economic Review, American Economic Association, vol. 63(3), pages 462-68, June.
  6. Maddison, Angus, 1987. "Growth and Slowdown in Advanced Capitalist Economies: Techniques of Quantitative Assessment," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 649-98, June.
  7. Prescott, Edward C, 1998. "Needed: A Theory of Total Factor Productivity," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 525-51, August.
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